An Introduction to Integrated Marketing Communications Chapter One An Introduction to Integrated Marketing Communications An Introduction to Integrated Marketing Communications © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

What is Marketing? Value Value Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization. Relationship marketing Relationship marketing Mass customization Mass customization Relation to text This slide relates to material found on pp. 7-8 of the text. Summary Overview This slide presents the revised definition of Marketing developed by the American Marketing Association in 2004. This new definition views marketing as being more strategic in nature as well as more reflective of the role it plays in the functioning of an organization. Use of this slide This slide can be used to discuss the new definition of Marketing developed by the AMA. It also shows the some of the key aspects of marketing which include creating, communicating and delivering value, the focus on customer relationships, using mass customization to deliver products and services in response to specific customer needs, and customer relationship management (CRM) which involves the systematic tracking of customers’ preference and behavior and adjusting the marketing program to meet their needs. Customer relationship management (CRM) © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Traditional Approach to Marketing Communications Publicity Point of purchase Sales promotion Media Adver- tising Packaging Special events Relation to text This slide relates to material on pp. 9-11 of the text. Summary Overview This slide shows the traditional approach to advertising and promotion where many of the marketing and promotional functions were planned and managed separately with different budgets, different views of the market, and different goals and objectives. Many of the marketing activities such as package design, sales promotion, and direct marketing services were viewed as ancillary services and handled on a project basis rather than integrating them into the IMC program. Use of this slide This slide can be used to show the traditional approach to marketing communications that lacks coordination and consistency. The disconnected puzzle pieces are designed to demonstrate how traditional approaches to marketing communications often viewed the various IMC tools as separate pieces of the puzzle rather than having them all work together. Public relations Direct response Interactive marketing Direct marketing © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Contemporary IMC Approach Packaging Sales promotion Direct response Media Adver- tising Point of purchase Public relations Publicity Relation to text This slide relates to material on pp. 9-11 of the text which discusses the contemporary approach to integrated marketing communications. Summary Overview This slide shows the contemporary approach to advertising and promotion which is referred to as Integrated Marketing Communications. This approach seeks to have all of a company’s marketing and promotional activities project a consistent, unified image in the marketplace. It calls for a centralized messaging function so that everything a company says and does communicates a common theme and positioning Use of this slide This slide can be used to show the contemporary approach to marketing communications that includes coordination and consistency. The connected puzzle pieces are designed to demonstrate how the various IMC tools are coordinated with media advertising and work together in a seamless fashion to create an effective communications program. Interactive marketing Direct marketing Special events © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Defining IMC IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences. Relation To Text This slide relates to the material on p. 11 of the text, which discusses the evolution of IMC. Summary Overview This slide shows the new definition of IMC developed by Don Schultz of Northwestern University who is one of the leading IMC scholars. The three major aspects of this new definition of IMC are shown in the next slide. Use of this slide This slide can be used to present the new definition of IMC developed by Schultz. You might compare this new definition to the original definition of IMC developed by the American Association of Advertising Agencies, which is shown on p. 10. The goal of IMC is to generate short-term financial returns and build long-term brand value. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

A Contemporary Perspective of IMC Recognized as a business process Recognized as a business process IMC Importance of relevant audience Multiple relevant audiences  Relation to text This slide relates to pp. 11-14 and IMC Perspective 1-1 in text. Summary Overview There are several important aspects of the definition of IMC: Recognized as a business process – rather than just tactical integration of various communication activities. Importance of relevant audiences – externally these include customers, prospects, suppliers, investors, interest groups, and the general public. Employees are an example of an internal audience. Demand for accountability – increased emphasis on the outcomes of marketing communication programs. Use of this slide This slide can be used to help students understand that IMC involves more than just coordinating the various elements of a marketing and communications program into a “one look, one voice” approach. Demand for accountability Demand for accountability and Measurement of Outcomes © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Reasons for the Growing Importance of IMC From Toward Media advertising Multiple forms of communication Media advertising Multiple forms of communication Mass media Specialized media Mass media Specialized media Manufacturer dominance Retailer dominance Manufacturer dominance Retailer dominance Relation to text This slide relates to material on pp. 11-14 of the text which discusses reasons for the growing importance of IMC. Summary Overview The integrated marketing communications movement is also being driven by changes in the ways companies market their products and services. A major reason for the growing importance of the IMC approach is the ongoing revolution that is changing the rules of marketing. These changes include: A shift in dollars from media advertising to other forms of promotions particularly consumer and trade oriented sales promotion. A movement away from mass media and advertising toward more targeted communication tools such as event marketing and sponsorship, direct mail, and the Internet. A shift in marketplace power from manufacturers to retailers resulting in retailers demanding larger promotional fees and allowances from manufacturers. Technology has allowed for a rapid increase in database development and information sharing. Marketers are using this information to improve market targeting. Greater accountability from advertising agencies and changes in agency compensation. Companies are moving more toward incentive based systems of compensation. Rapid growth of the Internet. The interactive nature of the Internet has made it a vital part of most companies’ communications strategy Use of this slide This slide can be used to explain the reasons for the growing importance of IMC in contemporary marketing. General focus Data-based marketing General focus Data-based marketing Low agency accountability Greater agency accountability Low agency accountability Greater agency accountability Traditional compensation Performance-based compensation Traditional compensation Performance-based compensation Limited Internet availability Widespread Internet availability © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin IMC and Branding 2005 Brand Value (Billions of Dollars) Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind. 1. Coca-Cola $67.52 2. Microsoft $59.94 3. IBM $53.38 4. GE $46.99 5. Intel $35.59 6. Nokia $26.45 7. Disney $26.44 8. McDonald’s $26.01 9. Marlboro $24.84 10. Mercedes $21.19 Relation to text This slide relates to material found on page 15 of the text. Summary Overview With more and more products and services available to consumers, developing and maintaining brand identity is becoming increasingly more important. Well known brands have a major competitive advantage in today’s marketplace. A well-defined and coordinated IMC plan contributes to overall brand identity and equity. Use of this slide This slide can be used to define brand identity and discuss the importance of building and sustaining strong brand identity. The list of the 10 most valuable brands, as measured by the brand consultancy company Interbrand, should be familiar to your students. You might discuss how these popular brands may have a competitive edge with consumers during the purchase decision process. IMC plays a major role in the process of developing and sustaining brand identity and equity. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Relation to text This slide relates to material on page 17-23 and Figure 1-2. Summary Overview The promotional mix is the basic tools used to accomplish an organization’s communication objectives. These tools include: Advertising – any paid form of non personal communication about an organization, product, service, or idea by an identified sponsor Direct marketing – communication directly with target customers to generate a response and/or transaction Interactive/Internet marketing – communication through interactive media such as the Internet, CD-ROMS and kiosks. Sales promotion – marketing activities that provide extra value or incentives to sales force, distributors, or consumers to stimulate immediate sales Publicity/Public Relations – Publicity is a form of non-personal communication not directly paid for or run under identified sponsorship. Public relations is a management function which executes programs of action to earn public understanding and acceptance an enhance the image of the company. Personal Selling – person-to-person communication between a seller and buyer Use of this slide This slide can be used to introduce and define the various elements of the promotional mix. Sales Promotion Sales Promotion Publicity/Public Relations Publicity/Public Relations Personal Selling © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Classifications of Advertising Consumers National Advertising National Advertising Retail/Local Advertising Retail/Local Advertising Primary vs. Selective Demand Advertising Primary vs. Selective Demand Advertising  Relation to text This slide relates to pp. 17-19 and Figure 1-4 in text. Summary Overview The nature and purpose of advertising differs from one industry to another and/or across situations. Advertising can be targeted toward consumer and/or business markets. Consumer advertising is classified as: National advertising – done by large companies on a nationwide basis. Ads for well-known brands and companies shown on television are an example. Retail/Local advertising – done by retail and local merchants encouraging consumers to shop at a specific store, use a local service, or patronize a particular establishment. Primary versus selective demand advertising – primary demand advertising is designed to stimulate demand for the general product class or industry. Selective-demand focuses on creating demand for a specific company and/or its brands. Advertising to business and professional markets includes: Business to business advertising – advertising that targets individuals who buy or influence the purchase of industrial goods or services for their companies. Professional advertising – advertising targeted to professionals such doctors, lawyers, engineers, and the like. Trade advertising – targeted to marketing channel members such as wholesalers, distributors, and retailers. Use of this slide This slide can be used to explain the various types of advertising and how the role of advertising can vary given the target customer, goals and objectives, or situation. Business-to-Business Advertising Business-to-Business Advertising Organizations Professional Advertising Professional Advertising Trade Advertising © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Direct Marketing is Part of IMC Mail Direct Mail Internet Sales Direct Response Advertising Direct Response Advertising Direct Marketing Relation to text This slide relates to material on pp. 18-20 of the text. Summary Overview Direct marketing is a form of integrated marketing communications whereby an organization communicates directly with target customers to generate a response and/or transaction. It involves a variety of activities including: Direct mail Direct response advertising (on TV, radio or in magazines or newspapers) Telemarketing Internet Sales Catalogs Shopping channel Use of this slide This slide can be used to provide an overview of direct marketing and the various forms it can take. Shopping Channels Shopping Channels Telemarketing Telemarketing Catalogs Catalogs © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Bose Uses Direct Response Advertising Relation to text This slide relates to material on pp. 18-20 on direct marketing Summary Overview This slide shows a direct response print ad for Bose Corporation promoting its audio products. There is a response card in the ad as well as an 800 number to encourage the consumer to make an inquiry or even a purchase. Direct response advertising and other forms of direct marketing has increased in popularity due to: Changing lifestyles particularly two income households with more income, but less time to shop. Availability and use of credit cards Toll free telephone numbers The rapid growth of the Internet Use of slide This slide can be used to show an example of a direct response ad. Although direct mail is the primary medium for this form of advertising, direct response ads often appear in magazines. Bose Corporation relies heavily on direct response advertising to market its audio products. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Using the Internet as an IMC Tool Obtains customer database information Educates or informs customers Communicates and interacts with buyers A persuasive advertising medium Builds and maintains customer relationships A sales tool or an actual sales vehicle Provides customer service and support Relation to text This slide relates t material on pp. 20-21 which discusses interactive marketing and the Internet as IMC tools. Summary Overview The rapid changes in technology have led to dramatic growth of communications through interactive media, particularly the Internet. This communication medium is unique in that it allows for the back-and-forth flow of information in real time. Customers can perform a variety of functions on the Internet such as receive and alter information and images, make inquires, respond to questions, and, of course, make purchases. The Internet has changed the ways companies communicate to their customers as companies and organizations of all sizes have developed websites to promote their products and services. Use of this slide This slide can be used to show that the Internet has changed the way companies communicate with their customers. Because of its interactive nature, it is a very effective way to communicate with customers. Actually, it is a medium that can be used to execute all elements of the promotional mix. In addition to advertising, companies can offer sales promotion incentives such as coupons or contests, do direct marketing, and execute public relations, and personal selling functions via the Internet. Educates or informs customers A persuasive advertising medium A sales tool or an actual sales vehicle Obtains customer database information Communicates and interacts with buyers Provides customer service and support © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sales Promotion Tools Consumer-oriented Trade-oriented Coupons Coupons Samples Samples Trade Allowances Premiums Premiums POP Displays POP Displays Contests/Sweepstakes Contests/Sweepstakes Training Programs Training Programs Refunds/Rebates Refunds/Rebates Relation to text This slide relates to material on p. 22 of the text, which discusses the role of sales promotion as an IMC tool. Summary Overview Sales promotion is defined as those activities that provide extra value or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken down into two categories: Customer-oriented – targeted to the ultimate user of the product or service and includes coupons, sampling, premiums, contests, sweepstakes, refunds/rebates, bonus packs, events, and loyalty programs. Trade-oriented – targeted to marketing intermediaries such as wholesalers, distributors, and retailers and includes trade allowances, price deals, sales contests, trade shows, and cooperative advertising. Use of slide This slide can be used to introduce sales promotion as an IMC tool and the various types consumer and trade promotions. Bonus Packs Bonus Packs Trade Shows Trade Shows Loyalty Programs Loyalty Programs Coop Advertising Coop Advertising Events Events Consumer-oriented [For end-users] Trade-oriented [For resellers] © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Various Uses of Sales Promotion Introduce new products Introduce new products Get existing customers to buy more Get existing customers to buy more Combat competition Attract new customers Attract new customers Sales Promotion Relation to text This slide relates to the material on p. 22, which discusses the role of sale promotion as part of the IMC program. Summary Overview There are various reasons why companies choose to use sales promotion in their IMC programs. The various uses of consumer and trade promotion include: Introduce new products Get existing customers to buy more Attract new customers Maintain sales in off seasons Increase retailer inventories Enhance or tie in advertising with personal selling Combat competition Use of Slide This slide can further supplement the discussion of sales promotion and why companies use this tool as part of their IMC programs Enhance personal selling Enhance personal selling Maintain sales in off season Maintain sales in off season Tie in advertising & personal selling Increase retail inventories Tie in advertising & personal selling Increase retail inventories © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Publicity Vehicles Feature Articles Feature Articles News Releases News Releases Interviews Interviews Publicity Vehicles Relation to text This slide relates to the material on pp. 22-23. Summary Overview Companies attempt to get the media to cover or run favorable stories on their products, services, or causes. There are a number of publicity vehicles available to marketers. Publicity can be generated through the use of: feature articles news releases press conferences special events interviews Use of Slide This slide can be used to show the various methods that can be used to generate publicity for companies, brands, organizations, or causes. Press Conferences Special Events Special Events © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Advertising Versus Publicity Factor Advertising Publicity Control Great Little Credibility Lower Higher Reach Measurable Undetermined Relation to text This slide relates to material on pp. 22-23, which discusses the role of publicity. Summary Overview Another important component of an organization’s promotional mix is publicity/public relations. Publicity refers to the non personal communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship. Companies attempt to get the media to cover or run favorable stories on their products, services, or causes. It usually comes in the form of a news story, editorial, or announcement. There are a number of advantages and disadvantages that publicity has relative to advertising. This slide compares advertising and publicity on a number of factors. Use of this slide This slide can be used to introduce publicity/public relations and to discuss how publicity compares to advertising with respect to various factors. Frequency Schedulable Uncontrollable Cost High/Specific Low/Unspecified Flexibility High Low Timing Specifiable Tentative © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Public Relations Tools Publicity Vehicles Publicity Vehicles Special Publications Special Publications Community Activities Community Activities Corporate Advertising Corporate Advertising Cause-related Marketing Cause-related Marketing Relation to text This slide relates to material on pp. 22-23, which discusses public relations. Summary Overview It is important to distinguish between publicity and public relations. When an organization systematically plans and distributes information in an attempt to control and manage its image and the nature of the publicity it receives, it is really engaging in public relations. There are a variety of public relations tools available to marketers such as publicity vehicles, special publications, community activities, fund raising programs, public affairs activities, and special event sponsorships. Organizations can also use advertising as a public relations tool. Use of Slide This slide can be used to explain the various public relations tools. It also provides an opportunity to discuss the differences between public relations and publicity. Public Affairs Activities Public Affairs Activities Special Event Sponsorship © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

IMC Audience Contact Tools Broadcast media (TV/radio) Print media (newspapers, magazines) Public Relations/ publicity Internet/ interactive Direct marketing Sales Promotion Product placements (TV and movies) Events and sponsorship Word-of-mouth Point-of-purchase (displays, packaging) Personal selling Out-of-home media Target Audience Relation to text This slide relates to material on p. 24 and Figure 1-5 of the text. Summary Overview A key aspect of IMC is that it encourages marketers to consider a variety of communication tools and how they can be used to deliver messages about their company or brands. Figure 1-5 shows the various ways by which consumers come into contact with a company or brand. Use of this slide This slide can be used to discuss that marketers must determine how valuable each contact tool is and how they can be combined to form an effective IMC program. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Marketing Plan 1. A detailed situation analysis 1. A detailed situation analysis 2. Specific marketing objectives 2. Specific marketing objectives 3. A marketing strategy and program 3. A marketing strategy and program Relation to text This slide relates to material on pp. 26 of the text, which discusses the marketing plan. Summary Overview The first step in the IMC planning process is to review the marketing plan and objective. Before developing a promotional plan, marketers must understand where the company (or brand) has been, its current position in the market, where it intends to go, and how it plans to get there. Most of this information should be contained in the marketing plan. Marketing plans can take several forms, but general include the following five basic elements: A detailed situation analysis, which includes an internal marketing audit and review and an external analysis of the market competition and environmental factors. Specific marketing objectives that provide direction, a time frame for marketing activities, and a mechanism for measuring performance. A marketing strategy and program that includes selection of target markets and plans for the four elements of the marketing mix A program for implementing the strategy, including determining specific tasks to be performed and responsibilities. A process for monitoring and evaluating performance and providing feedback so proper control can be maintained and necessary changes can be made in the overall marketing strategies and tactics. Use of this slide This slide can be used to explain the importance of marketing planning is in the development of an IMC program and how good IMC planning begins with a review of the overall marketing plan and objectives. Promotion is only one part of the marketing process and must be integrated into the overall marketing plan. 4. A program for implementing the strategy 4. A program for implementing the strategy 5. A process for monitoring and evaluating performance © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Integrated Marketing Communications Planning Model Promotional program situation analysis Analysis of the communications process Budget determination Develop integrated marketing communications programs Review of marketing plan Advertising Sales promotion PR/ publicity Personal selling Direct marketing objectives Message strategy Integrate and implement marketing communications strategies Monitor, evaluate and control IMC Program Internet/ interactive Relation to text This slide presents the IMC Planning Model which is shown in Figure 1-6 and discussed on pp. 24-32. Summary Overview This slide presents the IMC Planning Model which is discussed in detail in Chapter 1. This model presents the framework for developing, implementing, evaluating, and controlling the firm’s IMC program and activities. Use of this slide This model should be reviewed very carefully at the beginning of the course to show students what is involved in the development of a complete IMC program. It presents the framework that is used for the text and provides an opportunity to provide students with the “big picture” and a roadmap of what will be covered in the course. NEED TO PUT THE VARIOUS PROGRAMS IN SAME ORDER AS THEY APPEAR IN F 1-6. ALSO, IT IS MISSING THE ROW OF BOXES RELATED TO STRATEGY AND TACTICS. CAN YOU ADD THESE??? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin